Kenya’s Williamson Tea and Kapchorua Tea both reported a loss for the year to March 2015, blaming weak prices caused by a glut in supplies globally and in Kenya but forecast a recovery on lower output.
Tea earnings, one of Kenya’s main sources of foreign exchange, have slumped this year owing to a global glut, hurting earnings for both big companies and smallholder farmers.
Williamson reported a full-year loss Sh227.6 million ($2 million) compared with a Sh740.7 million profit a year earlier. Kapchorua had a Sh22.8 million loss from a Sh126.0 million profit the previous year.
“Prices have been weak through the year as large unsold tea stocks from other producers within Kenya have provided buyers with the unwelcome luxury of too much tea,” the firms, which share directors, said in a statement.
“We expect to see better prices as we enter the new financial year due to less tea available in the market as result of lower crop production.”
However, both companies secured an operational profit. Williamson reported a profit from operations before tax of Sh193.9 million from Sh614.6 million a year earlier. Kapchorua said profit from operations before tax was Sh76.8 million compared with Sh108.0 million.
